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Open Source Voting Machine Reborn After 6-Year War With IRS

John Sebes (left) and Gregory Miller, two former Netscape employees who hope to reinvent voting machines with open source software.

Photo: Ariel Zambelich/WIRED

In 2006, John Sebes and Gregory Miller hatched a plan to rescue democracy.

At the time, the United States was pumping nearly $4 billion into new voting machines, spurred on by Florida's 2000 presidential election fiasco. But the shift to machines built by companies such as Election Systems & Software and Sequoia Voting Systems (now called Dominion Voting Systems) had introduced all sorts of new problems.

Academics were finding deep flaws in the systems, and during every election, they seemed to fail somewhere. Earlier in 2006, voting machine problems marred primary elections in Cuyahoga County, Ohio, where officials scrambled to hire temp workers to reprocess thousands of unreadable optical-scan ballots.

For Sebes and Miller, the answer was open source software. Working with Netscape in the late 1990s, they had helped usher in the internet age, and now they were eying another tech revolution. Voting machines seemed to be a perfect place for open source software to do what it does best: create standard pieces of technology everyone can freely share, review, and improve.

With the support of their families, Miller and Sebes quit their day jobs and launched a project dubbed Trust the Vote. They created a nonprofit, the Open Source Digital Voting Foundation, to manage the effort. And they started assembling the building blocks of an election system — ballot design programs, voter registration services, and election-night reporting software. In 2009, they shipped their first code.

>'We're happy about our deserved designation, and yet we are so freaking angry at the IRS for what they made us go through and the damage they've caused us.'

Gregory Miller

Then the revolution stalled. The Open Source Digital Voting Foundation spent the next four years in a kind of government-induced limbo as the Internal Revenue Service delayed processing of its application for nonprofit status. That delay cost the operation an untold amount of grant and donation dollars, and though the project has produced some software, it still hasn't begun work on important things like ballot-counting and tabulation devices and accessible voting machines.

The delay is part of a much larger issue swirling around the IRS. This spring, an Inspector General report revealed that the agency was closely scrutinizing tax-exempt applications from conservative groups, many affiliated with the Tea Party, and the admission drew complaints nationwide. But the Tea Party is hardly the only organization affected. Progressive groups, health care data exchanges, and medical marijuana growers were cited by the IRS – and so were many open source software projects, including the Open Source Digital Voting Foundation.

The good news is the Foundation has emerged from IRS limbo. Two weeks ago, the IRS finally approved its application, ending a six-and-a-half-year review, during which the project filed hundreds of pages of documents and responses to agency interrogatories. "We're happy about our deserved designation," Miller says, "and yet we are so freaking angry at the IRS for what they made us go through and the damage they've caused us."

The decision from the IRS may finally breathe life into their voting-machine crusade, but it also may provide a roadmap for other open source projects wondering what it takes to achieve 501(c)(3) tax-exempt status these days.

You see, the IRS is concerned that these open source groups are merely commercial operations in disguise. As one BOLO from the IRS reads: "The members of these organizations are usually the for-profit businesses or for-profit support technicians of the software." As the Open Source Digital Voting Foundation found out, the agency is even scrutinizing the open source licenses used by these organizations, hoping to ensure code is licensed in a way that ensures it doesn't make anyone any money.

From Bel Air to the Doghouse
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In 2009, when their project shipped its first code, Sebes and Miller announced it with a splashy press event at the Bel Air home of Pulp Fiction producer Lawrence Bender. California Secretary of State Debrah Bowen was there, as was software legend Mitch Kapor. Miller met Quentin Tarantino. "We believe we’re catalyzing a rebirth of the industry," Miller said at the time.

But the glitz and the glamor and the unfettered idealism ended there. Over the next four years, Sebes and Miller were forced to tap their retirement plans to make ends meet. Staff hires were deferred. Code development was delayed. Their families were “pretty upset, frankly,” Miller says.

Due to the slowdown with the IRS, the Open Source Digital Voting Foundation had missed out on grants from charitable foundations and cash donations from individual donors. Back in 2006, Sebes and Miller thought they’d work on their voting project for a few years, set up a nonprofit open source foundation similar to Mozilla.org or the Apache Software Foundation, and return to their regular lives. But in their nonprofit limbo, they found they couldn’t move forward.

>Sebes and Miller were forced to tap their retirement plans in order to make ends meet. Staff hires were deferred. Code didn't ship. Their families were 'pretty upset.'

The ordeal started in February 2007. That’s when they filed their initial application with the IRS Exemption Office, expecting it to take a year or two. Other open source groups had done the same thing. The Apache Software Foundation and Mozilla.org, for example.

According to Sebes and Miller, their aims were altruistic. Voting machine companies are secretive about their products and outright hostile to security researchers who propose ways of fixing them. But with open source software, Miller and Sebes believed, county registrars and the companies that sold them voting equipment could improve the code and share these changes with each other. Bugs would be spotted more quickly. Voting machines would be more secure. Elections would be more trustworthy.

It soon became clear something was wrong with their IRS application. The IRS questions wouldn’t stop, and they seemed to ask the same thing over and over. Everything dragged. “They were taking the maximum amount of time available to them to respond to our last answers,” Miller says.

This is not an uncommon experience for open source nonprofits. And these IRS delays often come when the organization is gaining popularity, but not quite big enough to afford Washington lawyers, according to Luis Villa, a board member with the Open Source Initiative, an organization that promotes open source software. "This impacts open source development by distracting developer time, energy, and (sometimes) money from working on code," he says. And it tends to be most damaging to the kinds of projects that most need nonprofit status: those without deep-pocketed corporate backers.

That certainly applies to the OSDV. As the back and forth with the IRS dragged on, Miller began to suspect that the IRS was testing to see how far it could push the group's software licensing terms, making them unpalatable to business.

Photo: Ariel Zambelich/WIRED

License to Profit
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It came down to a tense showdown at the IRS offices in Washington, D.C. last November. With a room full of IRS representatives and lawyers at the table, Miller realized the agency had one, over-arching beef: It didn't want a for-profit company nabbing the Open Source Digital Voting Foundation code for commercial purposes.

Open source licenses allow this type of behavior, but Miller says the key question the IRS seemed to have was, "Can I find a way to limit or eliminate commercial gain off of charitable projects?"

Still reeling in the aftermath of the Tea Party BOLO scandal, the IRS is offering no public guidance on what it thinks about open source. Staffers charged with evaluating open source projects and the IRS press office did not respond to WIRED's requests for comment.

>'I've heard from several projects that have been through the process that they've been asked to put non-commercial restrictions on their licenses.'

Luis Villa

Villa says he knows of "at least three projects" that have been asked to put non-commercial restrictions on their software licenses.

That may seem like a small hurdle, but in reality, it's a big problem because open source licenses by definition cannot include these kinds of limitations. The whole idea is to share the code with everyone. That's how you attract the eyeballs needed to review and improve the software.

Although more extreme, Miller’s experience echoes that of Paul Biondich, the co-founder of an open source project called OpenMRS. Biondich is building software to help doctors in developing countries keep track of patients' medical records. He has also been waiting on an IRS nonprofit determination for nearly three years.

Late last year, he called a lawyer in the Exempt Division to ask about his case. When Biondich said that OpenMRS involved open source software, the lawyer knew there would be a problem. Biondich says the lawyer told him, essentially, "We’ve had issue in the past with for-profit organizations creating not-for-profits as a way to defer tax payments on the upfront development of something that they end up monetizing downstream."

The Open Source Initiative suspects "that the IRS incorrectly believes that open source nonprofits are predominantly formed by paid consultants who are trying to shelter for-profit activities, rather than (as required) doing things for public or educational benefit." While many open source organizations have corporate backers, says Villa, "this does not change that they are primarily, and inevitably, formed for public benefit since the code they create can be used by anyone."

In the Shadow of Mozilla
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But at least one nonprofit has run afoul of the IRS nonprofit requirements. Five years ago, the agency launched an audit of the Mozilla Foundation, the nonprofit behind the Firefox browser.

In some ways, Mozilla was a victim of its own success. The group had cut a deal with Google, making the Google search engine the default in the Firefox browser in exchange for millions of dollars in fees. The problem was that nonprofits like Mozilla are supposed to earn their money from a broad base of public donations and grants, not from a search-engine placement deal from a single corporation.

At one point, Mozilla was making 88 percent of its revenue from the Google deal. Mozilla eventually created a tax-paying corporation, Mozilla Corp., to handle the Google money, and in November, Mozilla settled the matter, paying $1.5 million in taxes. It had held back $15 million, apparently worried that the fine would be much steeper. Mozilla declined to comment for this story.

>'In a way, I’m kind of glad that they’re vetting something.'

Brian Behlendorf

Projects like Miller's and Biondich's aren't going to pull in hundreds of millions of dollars from Google, but even open source advocates agree the IRS has legitimate concerns in this area. With many big companies now embracing open source, they don't want to see nonprofit certification misused in order to bootstrap corporate development efforts.

"In a way, I’m kind of glad that they’re vetting something,” says Brian Behlendorf, one of the founders of Apache and a Mozilla board member. "After all, 501(c)(3)s are a gift from the government." However, he says that broadly flagging all open-source projects seems like a "clumsy move” from an over-staffed office.

The man who's represented Mozilla, Open Source Digital Voting Foundation, and other open source groups in their nonprofit applications says that the IRS Exempt Division is doing the best it can under difficult circumstances. The division's 200 employees process about 60,000 applications per year, and it's not an easy matter to figure out how old regulations — some of them dating to 1913 — apply in the internet age, says Marcus Owens, a partner with the law firm Caplin & Drysdale.

Still, there's no doubt the agency has had a hard time getting a handle on open source software. “I think the IRS was sort of struggling with the concepts," Owens says. "In the last four or five years, the IRS seems to have become increasingly inefficient in terms of dealing with these novel issues." He ought to know. Until 2000, he was director of the Exempt Division.

After six years in limbo, the Open Source Digital Voting Foundation knows this just as well. But despite all the time it took reviewing the foundation's application, the IRS has at least issued the right decision. There are some big changes happening in voting these days. Those Help America Vote Act-funded machines may need replacing, and voting patterns are shifting. Ranked-choice voting is catching on in some states, and more voters than ever before are voting by mail. If elections officials are going to keep up over the next few years, they're going to need all they can get.

"It's likely that the open source movement ... will become a very, very valuable resource in preparing the ground for a shift in how people vote," says Mark Ritchie, Minnesota's secretary of state. And the Open Source Digital Voting Foundation is now free to be a part of that shift.

The revolution is back on.

Correction 11:40am EST 08/06/13: An earlier version of this story incorrectly spelled John Sebes name. It also incorrectly identified Sebes as an employee of Netscape. He was a Netscape consultant.